Starbucks opens first store in tea-centric India

Coffee giant Starbucks has now ventured into India, the land of chai teas and lassi yogurt drinks.

A luxurious new store opened Friday in the Elphinstone Building in one of Mumbai’s most well-heeled neighborhoods – there’s a Hermes store nearby. Part of a joint venture with Tata Global Beverages, the store precedes two cafes also set to open in Mumbai next week.

The flagship location tries hard to sell the idea of an East-West union. Its standard offerings are served alongside Himalayan mineral water and foods such as the Elaichi Mawa Croissant, the Murg Tikka Panini and the Tandoori Paneer Roll. The décor is lavish, with Indian teakwood furniture, henna-like floor designs, bright billowing curtains and more.

That requires the company to gain traction in countries where tea rules. The company plans to have 1,500 stores in China alone by 2015, making the Asian superpower Starbucks’ second largest market.

India could be on the same track. Chains such as Barista Coffee, Café Coffee Day and Java City, along with more recent foreign arrivals such as Costa Coffee and Gloria Jeans, have primed the Indian market for the arrival of massive players such as Starbucks.

Rising incomes and an increasingly urban workforce also have hastened the growth of coffee culture. But Indians may be more interested in convenient brew – volume sales of instant coffee soared 66% from 2005 to 2010, compared with a 19% bump for fresh coffee, according to research group Euromonitor.

“We are investing for the long-term and see great potential for accelerated growth in India,” said Chief Executive Howard Schultz in a statement.

In late morning trading in New York, Starbucks shares were down 3.75%, or $1.78, to $45.63 a share.